New DOL Proposed Rule on PBM Fee Transparency: What Plan Fiduciaries Need to Know

The U.S. Department of Labor’s (DOL’s) Employee Benefits Security Administration (EBSA) recently released a proposed rule aimed at changing how pharmacy benefit managers (PBMs) interact with self‑insured group health plans. Published on January 30, 2026, the proposed rule, Improving Transparency into Pharmacy Benefit Manager Fee Disclosure (2026‑01907), seeks to provide plan fiduciaries with the information they need to properly evaluate PBM contracts and compensation under Employee Retirement Income Security Act (ERISA).

While the rule is not yet finalized, it represents an important development for employers and plan fiduciaries responsible for overseeing group health plans, particularly given the increased federal focus on PBM practices and plan‑level oversight.

Overview of the DOL’s Proposed Rule

The rule would require PBMs and PBM‑affiliated brokers and consultants servicing ERISA‑covered self‑insured group health plans to disclose all direct and indirect compensation, including rebates, fees, spread pricing, clawbacks and any other revenue tied to prescription drug distribution. The goal is to empower fiduciaries to determine whether PBM service contracts are “reasonable” under ERISA’s prohibited transaction exemption outlined in Section 408(b)(2).

The proposal implements Section 12 of Executive Order 14273, which directed the DOL to bring greater transparency to PBM compensation arrangements.

Key features of the proposal include:

• Comprehensive fee disclosures: PBMs must provide written disclosure of all direct and indirect compensation, including manufacturer rebates, fees and spread pricing amounts. These must be provided as monetary values or reasonable estimates, not formulas.
• Advance disclosure timing: PBMs must disclose compensation before entering or renewing a service arrangement, with required semiannual updates thereafter.
• Audit rights for plans: Fiduciaries must be granted audit rights to verify completeness and accuracy of PBM disclosures.
• Fiduciary protections: Relief mechanisms exist if PBMs do not provide required disclosures.

A public comment period ended on April 15, 2026. The rule will not take effect until the DOL issues a final rule.

How This Connects to Recent Federal PBM Legislation

The proposed rule is closely aligned with the Consolidated Appropriations Act, 2026 (CAA 2026), which introduced sweeping PBM reforms, including a requirement that PBMs must pass through 100% of rebates and remuneration to plan clients to maintain a “reasonable” contract under ERISA Section 408(b)(2).

CAA 2026 expanded the definition of a covered service provider to include PBMs and other entities supporting group health plans, making them subject to ERISA’s fee‑disclosure rules. Failure to comply can render the PBM contract unreasonable, triggering prohibited transaction penalties.

In summary:

• CAA 2026 established the underlying legal obligations.
• The DOL’s proposed rule provides the operational disclosure framework for PBMs.

Compliance Implications for PBMs and Plan Sponsors

Although the rule is still in proposed form, fiduciaries should prepare now for:

Significantly expanded transparency expectations: PBMs will need to disclose full compensation streams that have historically been opaque. This aligns with policymakers’ concerns that hidden PBM revenue may distort plan costs.

Increased documentation and recordkeeping: Fiduciaries should expect to receive more frequent fee and compensation reports. They will need processes to review, retain and document their evaluation of these disclosures for compliance purposes.

Audit rights will become standard: PBMs must provide audit access to their compensation records, allowing fiduciaries to spot inconsistencies or undisclosed revenue streams.

Contract review will become more intensive: Plan sponsors will need to evaluate PBM agreements for compliance with:

• The proposed disclosure rule
• CAA 2026 rebate pass‑through requirements
• ERISA 408(b)(2) reasonableness standards

Reminder: Plan Fiduciary Responsibilities Under ERISA

This is an important moment for fiduciaries to revisit their core obligations. Under ERISA, fiduciaries must:

• Act solely in the interest of plan participants and beneficiaries
• Ensure service provider arrangements are “reasonable” with compensation that is not excessive
• Evaluate fee disclosures from covered service providers (now including PBMs)
• Monitor service provider performance on an ongoing basis

Given the growing scrutiny of PBM practices, fiduciaries should ensure they have appropriate governance processes in place to:

• Review PBM disclosures
• Conduct competitive benchmarking
• Maintain documentation supporting their oversight decisions
• Engage legal or benefits advisors when needed

The DOL’s proposed rule gives fiduciaries a clearer path to meeting these duties while also raising expectations for careful review, documentation and ongoing oversight.

What Should Plan Sponsors Do Now?

Even though the rule is not yet finalized, fiduciaries can take steps to demonstrate proactive fiduciary governance and help reduce compliance risk. Considerations include:

• Review existing PBM contracts for disclosure and audit provisions
• Begin discussions with PBM partners about their readiness to comply
• Evaluate internal processes for reviewing compensation disclosures
• Stay informed on the final rulemaking timeline

Weaver Can Help

The DOL’s proposed PBM disclosure rule represents a major shift toward transparency in prescription drug benefit administration. While still in the proposal stage, its alignment with Congress’ recent PBM reforms signals that greater transparency and stricter fiduciary expectations are here to stay.

Weaver can help plan sponsors and fiduciaries prepare now for potential PBM transparency changes. Contact us today. Our employee benefit plan audit professionals can review PBM arrangements, support fiduciary oversight processes position your plans to respond effectively once final rules are issued.

Authored by Marc Newman and Judah Kurtz

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